An ugly jobs report

By
Ezra Klein

The November jobs report is ugly. Last month, the jobs report showed the economy added 150,000 jobs, sparking hopes that recovery was underway. And the recent economic data had been good: Black Friday saw a lot of shoppers, and initial unemployment claims had been going down. The expectation was that November's report would be yet another piece of good news.

It isn't. The economy created 39,000 jobs in November -- about 160,000 fewer than it'd need to begin cutting into unemployment, and about 100,000 less than it'd need to just keep up with population growth. Speaking of unemployment, the unemployment rate edged up to 9.8 percent.

It's not that these numbers are catastrophic: They're worse than October but better than September. They're just evidence that the labor market's recovery hasn't taken hold yet -- and that is catastrophic. This likely explains why the Federal Reserve is agitating for not just quantitative easing, which it can simply do on its own, but more fiscal stimulus, which Congress would need to approve.

If there's any good news in the report, it's the revisions. "The change in total nonfarm payroll employment for September was revised from -41,000 to -24,000, and the change for October was revised from +151,000 to +172,000." That is to say, the September and October reports undercounted by about 40,000 jobs. That's cold comfort, though.

More reasons to cut taxes on millionaires (the middle class tax cuts are just a waste of money), cut jobless benefits, cut social security, cut healthcare and cut the deficit. How else will our economy recover? Isn't this why we elected republicans?

Yeah and when those 160,000 sweater folder jobs at Macy's disappear in January the news will be even better. Better still is when the government lays off all those workers we can't afford because we need to give tax breaks to the billionaires. And New York City alone plans to lay off 10,000 city workers. I imagine the story will be the same everywhere else.

Corporate America will continue to grow fat off the sales in India. The problem is, their cost of living is very low so the prices can't be that high.

Attention Christmas Shoppers. You are aiding and abetting the enemy. Those of you outside New York should realize you have more to fear from Corporate America than you do from any terrorist. So stop buying their stuff (especially if it is made overseas)

It's actually nothing but good news if you're an investor. The market is down only about 1/10 of one percent right now, although it will trade in big swings today.

This pretty much guarantees that all the tax cuts will be extended. It all guarantees that QE2 will reach the full 600 billion, and opens the door to the possibility of a QE3. That's why the 10 year has dropped this morning, although nowhere near Ezra mistakenly thought it was. LOL

The End of The American Way? I live in the extremely depressed city of Grand Rapids Michigan. With more and more people falling off the unemployment rolls without finding work what is the real unemployment rate 23%-more? The ones that have a job like me rarely make a living wage, try raising four children on $7.40 an hour and I'm lucky! The thing is what is going to happen to our society? The gap between the rich and poor has never been wider at least in my 51 years, heck I thought I would get health insurance. Obamaism certainly has not helped at all and now everyone knows it. I read a couple of articles in the http://www.grandrapids-businessreview.com recently addressing this issue, written by the always insightful artdeco. You may want to read them. His bottom line though is that we people who live below the poverty level will have to come together to start our own society together. If Obama sees to let something trickle down to us fine but we certainly can't expect change or help. His message is American in that we the poor need more self reliance more than ever and waiting for government help that will never come is foolish and UN-American.

A fundamental piece of the solution is understanding the 900 lb gorilla that resides in Washington--corporate America's reliance on communist China's cheap labor for profits. Unfortunately our Washington represenatives--Republican and Democrat both--have no concern with what our trade policies with China are doing to the American people and this Nation. They ignore the problem because they profit either financially or politically every time an American loses his job or a little factory or shop closes down and heads off to China. Yeah, it's really easy to dislike Washington.

Oh, one ominous note in all this. If you in any way depend on a fixed income for the next 5 years or so and are unable to raise that level, you might have a problem. Ag commodity prices are rising again today, and oil is only stagnant, not dropping. The Euro has risen a bit, meaning the dollar is down. All of the above means that inflation will be heavily dug in before the "core inflation" numbers ever reflect it.

The only way to get this country back on it's feet is to first extend ALL the Bush tax cuts, encourage businesses to hire via tax credits and deregulation and start boycotting companies like GE, etc., who have outsourced American jobs overseas...ie., BUY AMERICAN MADE whenever possible! If I have to discard one more useless, broken product th/ bears the insignia 'Made in China'...!!!

And this crooked, self serving congress and so called government ofours just keeps right on funnelling billions of our dollars to afghanistan so it can be stolen by karzi and his entire crooked cabinet, all the while knowing that they are doing this.
So why is our government continuing to ship palates of cash to afghanistan so karzi can steal it from us and ship it out of the country?
What is up with that?
Oh, I'm sorry, I forgot, this government would rather be involved in foreign countries affairs where it can continue to murder people over there rather than spend the money here at home.

tally up what the epa and state enviro-wackjobs cost business to operate in the usa and apply that cost to all imports from country's that don't have to deal with the religion of paganism, the worship of the little animals,the birds ,the trees and mother earth. wal=mart will be gone.

Send ALL illegal aliens home! No excuses, No exceptions. Stop issuing new and renewal "Temporary" work visas until the unemployment rate is less than 5%.
@FromHerndon

Hello!?! Don't you think that if we could have domestic workers who could actually fill these hi-tech or labor intensive jobs, we would do so? The fact is that the U.S. is not graduating enough engineers to fill the roles needed to keep the economy going. Stop allowing your kids to major in these useless majors, hoping to get a job in THIS economy. Coupled with the fact that we've become fat and happy with accepting unemployment checks rather than going out and picking strawberries that "illegal" immigrants are willing to do.

Novembers numbers are out, and no surprise to me, unemployment went up!

Why no surprise? Because, for the past 6 months our government has been hiding the truth per order of Democrats in control - namely the White House. June through October we have good numbers then what happens? The election happens, and in spite of the false numbers Democrats get beaten to a pulp. No more need for false numbers come November! So why so shocked that the numbers are bad today?

MSNBC is shivering with fear as I speak. Chuck Todd has shivers down his leg.

I don't follow ag commodities too closely, but the last time I looked eggs & cotton were up - up to levels slightly below that of 2008. That doesn't seem unreasonable to me. I think this is the primary reason they are excluded from the CPI. They are just too volatile and don't reflect general inflationary trends. Also, I have definitely NOT noticed any increases in prices at the grocery store this year. For a family of four, I budget $175 / week for groceries, but since late this summer we've been coming in pretty regularly at $130-150 per week (depending upon whether it is a diaper week or not!).

jjrocket13- Did you even read the post? The numbers for September and October were revised upwards in this report. So it sounds like they low-balled the numbers over the summer and into the fall. But, the fact have a well-known liberal bias.

It is a pretty ugly jobs report, and I think Mr. Obama's 'new normal' comment earlier this year is probably a glimpse into the real state of the current economy. The economy since the 1980s has been growing enormously and largely based on the growth of underlying assets, most notably housing. Corporate notes and stocks rose, giving companies the ability to borrow too. Credit card debt became the norm, home equity credit also boomed. The result was so much "fake" money running around in the economy that it pumped up the value of everything. As people borrowed more, they bought more, which required more jobs, and kept the economy at 5% unemployment. In fact, when the economy began to take a dip in Bush's first term, he used every Executive Branch tool in the book to keep it humming: low taxes, low interest rates, and increased government spending/borrowing. We've been on borrowed time, Bush didn't address it, he just made it worse to save a second term.

So when a lot of those assets went bust (most famously, housing, along with stocks and corporate debt) bank's credit froze as they no longer have sufficient capital to loan. the economy shrank dramatically. There is significantly less money in the system today than there has been in the past. It's equivalent to having 5 credit cards before and now only having one.

When bubbles happen, they often happen with commodities: food, oil, tulips, etc. They drive the price up and it eventually goes bust as new people get in on the game and there's excess supply, and we finally get cheap food, oil, tulips, etc. But in this case, the bubble was and stin perceived value: the value of their house, or the value of their company. Banks allowed credit to be borrowed against that value, compounding the problem. When housing goes bust, or the stock markets recede, we're left with nothing but hobbling debt that will take years to unload. This is going to be the new normal for some time, until we can begin producing again to the point where housing, stocks, etc can re-inflate naturally (not just on paper) to the point where we were in 2005-2007.

The economy can barely create jobs, and those it creates go to foreign-born workers:

"In the year following the official end of the Great Recession in June 2009,1 foreign-born workers gained 656,000 jobs while native-born workers lost 1.2 million, according to a new analysis of U.S. Census Bureau and Department of Labor data by the Pew Hispanic Center, a project of the Pew Research Center.2
As a result, the unemployment rate for immigrant workers fell 0.6 percentage points during this period (from 9.3% to 8.7%), while for native-born workers it rose 0.5 percentage points (from 9.2% to 9.7%)."

Very good observation. The retailers and wholesalers have been eating the increased commodity costs. Your numbers are unfortunately incorrect though. Cotton was at literally it's all time recorded high last month.

These price increases cannot be hidden forever though so a few analysts have already started to revise their 2011 numbers downward for companies like Kelloggs and General Mills, more will follow in the new year. You are no doubt already seeing somewhere around $3.00 at the pump for gas.

That core inflation vs. real inflations debate is not about you or me. We are left toally out of the equation. The reason for the difference is that so many automatic changes in governmnet spending levels are keyed to these numbers. So yes, it makes eminent sense for the government to use core inflation, but no it doesn't in any way reflect what you will be paying in your ordinary life.

For instance the RBOB numbers for gasoline have risen 20-25% this year alone, all the while the Fed is worrying publicly about inflation.

Let' see now; real UM @~18% and the Dems priority is to give amnesty to millions of illegals and NOT seal the border and NOT deport illegals already here. BRILLIANT!

So, libs, does UM need to reach 25%, 35%, higher? If the Dim majority party doesn't get its act together, 2012 will see Obie and the rest being physically run out D.C. by citizens. The ONLY thing that matters are RESULTS, not talk. So far, you can see the results in how many citizens can't find work. Period.

Last I checked the minimum wage was $7.25/hour. What's stopping you from accepting that wage, which is hardly a living wage. If anything, we need to raise the minimum wage to ensure a decent standard of living for all workers. Just because there's fewer jobs available doesn't mean we should offer slave wages. People would be working but our standard of living and quality of life would be greatly diminished. Do you really aspire to the standards of living for this country that's found in developing nations?

Posted by: markf40: "If anything, we need to raise the minimum wage to ensure a decent standard of living for all workers."
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BRILLIANT! OBVIOUSLY you have never created a successful company that employs people. Mandate more expense for a business and hiring goes DOWN. To get your Lib card, do you have to prove an IQ<70? Apparently...

Johnkwhite: Gorillas very rarely reach 500 pounds in the wild, so your theory about corporate America, China and the 900 gorilla in the room can be dismissed.

Here's my theory on how to address unemployment. Make it cheaper and easier for companies to hire employees, ones they want. This is done through reducing business taxes, trimming regulatory requirements related to health care and numberless other matters, and rationalizing liability laws that make (non-productive) plaintiffs lawyers rich but impose heavy insurance burdens on business.

It's grimly amusing to watch the professional commentators at times like this. Come on, Klein, are you actually surprised, or are you just pretending to be? No one other than people like you has pretended to be fooled by the "recovery" talk.

Oh, and in about six weeks, you'll be hyperventilating about the statistical roundup that'll show the Christmas retail picture didn't even remotely match the hype that we are currently being fed.

Honest to God, I really think you people are being paid to go through the motions. It's one of the hallmarks of banana republics and collapsing empires.

I run my own business and work for the wage that I feel is sufficient to meet my and my family's needs. And no, I don't have a "Lib card" (do you have a "Con card"?), I don't believe that intelligence is quantifiable, and I certainly don't want to see my fellow countrymen and women having to work long and hard and still struggle to put food on the table.

Posted by: 54465446: "Ironically enough illegal immigration benefits Republican business interests as much as it benefits Democratic voting interests."
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Ironicaly enough, AZ Repub leg created a law that imposes civil & crim penalties against businesses employing illegals. Lib groups AND the Obie Admin have joined together to tie it up in the courts.

Like I said, ACTION not words. At the moment, Repubs are ACTING to fix, Obie & the Dims, ACTING to keep it broken. Objective evidence. 2012, Obama will be retiring.

Posted by: markf4: "I don't believe that intelligence is quantifiable, and I certainly don't want to see my fellow countrymen and women having to work long and hard and still struggle to put food on the table."
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If you REALLY want people to able to put food on the table, you wouldn't espouse policies that KILL jobs. Ergo, you are either lying or, you are foolish. Reality.

We are in a recovery. Little noticed in all the hype about the jobs report was the report an hour later that the service sector of the economy grew for the 11th straight month even while manufacturing orders fell.

We are looking at the wrong metric if we expect to see anything but service jobs growing. We are a service oriented economy now. I accept that and plan accordingly while others worry about manufacturing jobs that aren't coming back.

The jobs report is just another piece of evidence that our employment problems are the result of a long term trend rather than some kind of exceptional accident. The history of the different components of the non farms payroll make that reality clear to anyone who actually is ready to accept objective reality. The depth of our problem is illustrated by the continued fantasy that Federal Reserve monetary policies can make some kind of constructive contribution to its solution. That fantasy is simply a denial of the objective reality of the last decade. During that decade Federal Reserve attempts to stimulate the economy have only made the long term problem worse. The current extreme Federal Reserve policy will not have any better results. There is some potential for intelligent government fiscal policy to have more positive results. The path to success is through policies that could help define the shape of America's twenty first century economy. A clearer vision of that shape could potentially help guide the various investments that will be needed by businesses and workers to participate productively in that economy. Unfortunately, the reality is that there is no consensus of any kind about a sustainable shape for America's economic future. Even if the will was available for political action, there is nothing close to an established vision of what it should be. So we continue to rely on the Federal Reserve's policies with their track record of proven failure. There is also the other reality that people generally want to deny. That is the pile of economic wreckage from past Federal Reserve failures that we still have to clean up. Conflicts over how to clean up that wreckage are going to continue to suck up much of our political energy for several years to come.

"I run my own business and work for the wage that I feel is sufficient to meet my and my family's needs. And no, I don't have a "Lib card" (do you have a "Con card"?), I don't believe that intelligence is quantifiable, and I certainly don't want to see my fellow countrymen and women having to work long and hard and still struggle to put food on the table."

What's the goal here, to price these people out of jobs?

They will still struggle to put food on the table with Unemployment Insurance and SNAP, but at least they won't be working hard. Some other sap will have to pick up the tab on their behalf.

Let's face it - we have become the Corporate States of America. NO ONE can dispute the facts - the gap betwee rich and poor is growing at an alarming rtae and corporations are sitting on TRILLIONS of dollars of profits. Meanwhile, any solid middle-class jobs have gone overseas and many (myslef included) who used to have good salaries, benefits etc are now chronically under-employed making at or barely above minimum wage with no benefits.

Don't give us this BS about how the wealthy need tax cuts to keep us underlings employed -- none of them will be running out to hire us == they'll just keep saving more.

It's a disgrace - and I cannot believe that there is not a mass uprising.

Sounds like 12thgenamerican would prefer to breathe the polluted air found in the likes of Beijing. You know that China had to put restrictions on driving before and during the Olympics, right? Maybe 12thgenamerican's kids would prefer to play with the lead-painted toys from there, too?

Suggesting that the US should aspire to get rid of our environmental quality (such as it is) is absurd and irrelevant. Don't think you can trade economic health for environmental health.

Roytex, Johnkwhite may or may not be correct in his analysis, but I would hope you realize that he is not really talking about a real 900 lb gorilla. "900 lb gorilla in the room" is an "old" expression which even has same titled web-sites.

Yes it's true that if a business's expense (i.e. wages) goes up w/o revenue going up at the same time then costs (i.e. jobs) will be cut.

At the same time when you look at the economy as a whole with the top 1% earners getting 24% of the income you know the economy is getting out of balance big time. And if this vast income does not get recycled thru either consumption or new investment but thru hoarding or bidding up financial assets (bubbles) then macro demand will drop, dragging down macro supply (jobs).

The only thing that has kept the economy from getting totally out of kilter has been massive government spending so far, spending apparently financed in large part by borrowing the income unspent by the top earners.

So there is an argument to be made for raising the income of the lower brackets. How you do it is the six trillion dollar question...

Patriotism aside for the moment, why would any American business want to bring jobs back home? You have a liberal Senate targeting higher taxes for those who generally generate the wealth for everyone else. You have a President who wants to impose increased costs for medical coverage. The same president who sees nothing wrong with increasing trade agreements with countries that put us at a disadvantage. You have a deficit panel that wants to add even more costs. You have a congress that won't cut its own spending and insists on higher taxes for American business to pay for their spending habit. The list goes on and on. The real surprise is that any jobs were added at all. When's the last time you actually went shopping? And how many store clerks were there to assist you? And America is now in the service industry. You can only circulate a dollar for so long before it's worthless.

It is more than unfortunate that we didn't have an unemployment commission rather than a deficit commission. But here's a thought: If lower taxes on the wealthy create jobs, give tax breaks to those who actually hire instead of everyone above $250,000 (or $1 million--I don't care). Test the theory, put your $ where your mouth is.

70% of American jobs are now made by small business owners. As a business owner when you don't know what your tax rate will be in 2011 you can't do any hiring. Until the tax rate issue is settled and business owners can assess their tax rates and then assess how many new jobs they can afford to create that chart will continue to show declines.

It is more than unfortunate that we didn't have an unemployment commission rather than a deficit commission. But here's a thought: If lower taxes on the wealthy create jobs, give tax breaks to those who actually hire instead of everyone above $250,000 (or $1 million--I don't care). Test the theory, put your $ where your mouth is.

Posted by: 54465446" "It's a beautiful day. Oil is up, gold is up ag is up, and the market as whole didn't tank on the jobs report. We can save illegals for another day, can't we?"
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I see that you noticed but didn't recognize the impending inflation. Sorry but, with ~18% UM, illegals are integral to the problem of both UM and state debt & crime.
With the Dims in congress concentrating on amnesty for law breakers rather than the econ it can't be ignored.

The fact that this country would rather throw billions, perhaps trillions, of dollars at Iraq and Afghnistan, when history tells us it will all be for naught but at the same time refuses to help the unemployed says an awful lot about the crooks in Congress (both Republican and Democrats) that run this country. We, the taxpayers, bailed out banks, hedge funds, McDonalds, Harley-Davidson, etc.,. They turned around and gave themselves bonuses and shipped jobs overseas. Now we are going to reward the same folk with bigger tax breaks because that will create more jobs just like that same approach was suppposed to do during the Bush era but somehow failed. The vast majority (98%) of Americans are being duped and have been ripped off by Congress for a long time. So, if we're heading down this path then the federal government should stop giving any taxpayer dollars to individual states for spending on health, education, agriculture, and transportation. That should be there own problem to deal with. That means that Kentucky, South Carolina, Mississippi, Louisiana, Texas, Georgia, Alabama, and all the other bottom feeding states that rely on taxes from other states to survive should take care of themselves.

Welcome to the global economy, eh? Sales are up but employment is down. Meaning robust sales arise from items manufactured abroad. This pretty scary because consumer spending looks to be disconnected from employment.

I guess our only alternative is to be playing the stock market as our source of income.

Posted by: barrylarryandtimmy : "At the same time when you look at the economy as a whole with the top 1% earners getting 24% of the income you know the economy is getting out of balance big time."
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If you REALLY want to fix the parasitic situation you have to name it 1st. Frac Reserver banking, The Fed and having private banks involved with the money supply. Get rid of that and the parasite problem is gone. BTW, in case anyone didn't know, the "housing/derivative crisis" would NOT have been possible without those systems I mention above. Alas, only two people in congress see this or aren't too corrupt yet to mention it;
Kucinich & Paul

Glad to know that Obama is off to Afganistan like anybody cares anymore while the Republicans are obsessed with how much richer they can make the already rich while they scheme and plot to make that happen.

I just went shopping at Macy's last night and they had 50% off sales PLUS another 25% off coupon on some items I bought. They also didn't have the usual Macy's shopping bags with handles that I always get each year but just the little plastic ones. Hard to believe sales are actually good if they are going to those extremes.

As of 2008 the U.S. ranked 31st worldwide in net migration rate, with 2.92 migrants per 1,000 population. Immigration rates from Central America to the U.S. have been steadily dropping since 2000, owing to our poorer economy. Why begrudge a person seeking a better life? All of our ancestors sought that when they came here. My ancestors came to these shores from between 1620 and 1900 or so, and I'm thankful that they were welcomed rather than scorned. I'm sure the same could be said for your own ancestors.

SusanMarie2 I just went shopping at Macy's last night and they had 50% off sales PLUS another 25% off coupon on some items I bought. They also didn't have the usual Macy's shopping bags with handles that I always get each year but just the little plastic ones. Hard to believe sales are actually good if they are going to those extremes.
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I would like you to check the labels on everything you bought at Macy's. You will find that most if not all came from a third world country that used sweat shop style labor. There are search engines Google "Made in America" and "Made in USA" and look at the clothing you find on that search engine to purchase. (http://www.americansworking.com/) Then your money will go to keep Americans working. Continuing to buy that cheap Chinese junk from Macy's actually lengthens our own recession. Try it you may find you actually like the quality better when it doesn't fall apart after the third laundering.

If YOU were really interested in creating jobs, you'd want to do something about the wide disparity between the average wage of a CEO and the average wage of the workers from that company. Do you want that gap to be narrowed? Or do you prefer to see a top-heavy economy?

Posted by: markf40: "If YOU were really interested in creating jobs, you'd want to do something about the wide disparity between the average wage of a CEO and the average wage of the workers from that company."
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Irrelevant. Communistic dictatorships telling people what they are or aren't worth doesn't create jobs, they destroy whole economies as any sane person knows by EVERY experiment tried shows. Less gov interference DOES help create jobs.

Yes, it is ugly and you might think that anyone with the brains of a radish would stop outsourcing jobs. But, and the latest Wkilleaks documnts on India and the H1-B visa provide a case study that this newspaper has purposelfully ignored, the Obama White Huse *encourages* the loss of jobs. In 2009, just to use one example, the cable makes clear that the US lost 345,600 hi-tech jobs, but Obama, at the encouraedment of Hillary and Bill Clinton, granted a recor number of H1-B visas, more than 100,000, and a still, as yet claassified, several number thousand L-1 visas. All to one India outsourcing firm, all for MONEY! ---- illegal campian contributions, political favors, a scummy series of exchanges that remind me more of gangs or the Mafia than f government. Th upshot is, though, tat Obama, in just 2009, on just fr the hi-tech sector of the economy, purporsefully caused the loss of more than half a million h1-tech jobs. If you look at the H1-C visa and nursing jobs, you will find similar paaterns. The sad fact is, this President isn't just a crook, he and his Adminstration are alost completely and directly responsibe for the current unemploent mess.

I know! Sales are because of the big-ticket items which don't need shopping bags and which only the wealthy can afford. It affects the numbers a little bit and makes it appear average people are spending more when they are not.

Posted by: markf40 "Why begrudge a person seeking a better life?"
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Make you a deal. Put your money where your mouth is. Illegals cost states BILLIONS every year. YOU get together with everyone who wants them and YOU guys pay the states for the cost so it doesn't come out our pocket. Also, in SoCal >80% of murder warrants are for illegals. If the illegal perp can't be caught, one of YOU take his place in jail AND pay monetary recompense to the victim. Deal? Otherwise, quit being a hypocrite...

I'm getting sick of all these brainwashed Republicans and their "cut taxes on small business; small business this and small business that." They don't realize that some businesses with 1500 employees and $35 million receipts are considered small businesses.

If the government wanted to wipe out our national debt all it would have to do is tax audit every saintly small business. The resulting back taxes and penalties would wipe out the debt because small business people are major league tax cheaters. I know, small business accounting was my business and I lost a lot of business because I refused to allow gratuitous cheating.

Businesses hire people when the cost of the additional employee is less than the income he will produce, i.e. produce net profit. This Republican B.S. about increasing millionaire tax rates by four percent will wipe out jobs is insulting to anyone with a brain half the size of a cold blooded reptile. So some millionaire is not going to hire anyone because instead of making a $thousand profit he will make only $960? Give me a break.

If the Bush rates are so critical to job creation, why aren't millions of jobs being produced today under the current tax rates?

Strange rant given the fact that conservative business-types have been raking Obama over the coals for DECREASING the number of H1-B visas granted. In their world, he is hurting the American economy by forcing all of the high-tech jobs overseas.

The simple truth is that the talent pool in this country goes into being doctors, lawyers, and financial schemers. That's where the money, power, influence, and fancy cars are at. Who wants to learn differential equations when you can learn derivatives and make much more money?

Democrats don't want to "raise" taxes as so many commenter complain, they simply want to restore them to the viable level they were at last time we really prospered and added jobs. That should be a no-brainer. If Bush's tax-cuts were sustainable, they would have made them permanent. As it is, he left a time bomb for the next president. If we keep funneling money to the top via tax cuts, subsidies, no-bid contracts, etc. we will find our way of life unsustainable. An inverted pyramid eventually falls of its own accord. We are losing the education, innovation, and entrepreurership battles, not because were are less capable, but because we coddle the rich and expect the poor to pull themselves up with absolutely no bootstraps. Heck, the bottom tier will be lucky to have shoes if thng continue the way they are.

"I'd be interested in seeing Ezra, Paul Krugman or any of the other New Keynesians respond to Fareed Zakaria's Op-Ed from November:"

I don't think Krugman would disagree with the description of long-term growth fundamentals.

He would probably say that his focus has been on what we should do about short-term food-on-table issues. The GDP growth rate in 2034 is important, but in the midst of a crisis it shouldn't be on the front burner.

This is what two years of a Democratic administration with majorities in the House and Senate have given us. Where are the jobs creation programs, the tax incentives for business to hire new workers, and the other anti-recession programs Democrats have traditionally embraced. They have turned their backs on the middle class, and surrendered any claim they are the party that cares how policy impacts real working people. I read projections by economists that high unemployment is likely to continue for several years. But if there's still 9 percent unemployment in this country in 2112, then Obama and his Democratic collegues are certain to join the jobless on the unemployment lines.

50% of our import deficit is oil imports (and going to grow). The gov't needs to fix that more than anything else. The FED needs to fix that by not printing money. Stable prices is the best way to create jobs, not Wall Street gambling with free money from the FED which makes the poor and middle class suffer while the rich get richer.

Forget Healthcare, forget tax cuts. Energy policy and finding solutions to the energy problem is what will FIX the economy.

"The FED needs to fix that by not printing money. Stable prices is the best way to create jobs, not Wall Street gambling with free money from the FED which makes the poor and middle class suffer while the rich get richer."

The inflation rates and tax rates on the wealthy have both been the lowest they've been in the past 70 years this past decade, and the middle class and poor have suffered in terms of jobs and salaries and the rich have done very well.

Internal inflation tends to benefit the poor and middle class relative to the wealthy, or more specifically, the banks. Which is why we put bankers in charge of controlling inflation. While this tendency is generally weak, with home prices underwater around the country and debt hanging over everyone's head, a good round of inflation would do wonders for everyone. Just not, you know, bankers.

"The FED needs to fix that by not printing money. Stable prices is the best way to create jobs, not Wall Street gambling with free money from the FED which makes the poor and middle class suffer while the rich get richer."

The inflation rates and tax rates on the wealthy have both been the lowest they've been in the past 70 years this past decade, and the middle class and poor have suffered in terms of jobs and salaries and the rich have done very well.

Internal inflation tends to benefit the poor and middle class relative to the wealthy, or more specifically, the banks. Which is why we put bankers in charge of controlling inflation. While this tendency is generally weak, with home prices underwater around the country and debt hanging over everyone's head, a good round of inflation would do wonders for everyone. Just not, you know, bankers.

Do the math. If you tax 1 million people earning $20,000/yr at 10%, the result is $2 billion in revenue, the same amount you would get if you taxed 1,000 people earning $1 million per year at a 20% rate. Those 1,000 people would retain $800,000 in income, not including their investment returns, surely enough to both comfortably live upon and to reinvest in business development. On the other hand, the one million people whose income is now reduced to $18,000 have less spending power and live on the margin, and less of their income goes back into the greater economy. Why are you so ready to consign one million of your fellow Americans to further economic hardship to spare the excess income of the richest of the rich? Do you really think that results in a better society and better living conditions? Or might it be that the resulting social ills are more damaging to your condition than you perceive or are aware of?

The unemployment report reflects the broken banking system that created this monster with the help of the Republican leadership for the past 30 years. Considering the fact that many management were not fired for their role in it and we the taxpayers saved their job so they can get big bonuses for the good job they did.

Geithner's stimulus plan to use the banking sector to power the recovery effort is not working and even James K Galbraith said so himself because they have tightened the credit to point that many business can not get loans to expand their operations thus hire people because politics plays a role in this decision.

What you are seeing with the Republicans doing to Obama is exact game plan they put on Clinton during his two terms..

Inflation does not benefit the poor and middle class. Quite the contrary. They see a lower standard of living and businesses margins are squeezed since they have higher input costs, they were already paying people minimum wage, and their customers have very little disposable income due to the inflation in necessities like gas, electricity, food, and clothing on their backs. Since the FED does not include these figures into CPI, that makes deflation look like a threat since like I said, people have less disposable income.

The country is screwed unless we can create alternative energy jobs that cannot be outsource to wean us off the oil imports that are crushing us.

Wall Street certainly doesn't help but can you blame them when the FED is giving them so much free money and they have no where to put it except in commodities? The FED needs to stop QE2 and raise rates. Commodities would look less attractive while equities would look more attractive (and therefore create jobs).

Obama promised to tackle the trade and has not. It is the trade! All we learn from economists, including Larry Summers, is well "not quite" right. See my reseach done 14 years ago: http://knol.google.com/k/savings-and-growth#

If the free market can't provide jobs, and government stimulus of the free market doesn't work, the only thing left is direct government job creation like FDR's CCC or NRA. People don't really care who signs their paycheck and the first political party who figures this out wins.

The greatest thing of all is that if this economy ever does recover, you are creating a very disgruntled work force who will hate you and do anything to bring you down. Every manager will have a Julian Assange working for them. But they won't know who it is.

And to the posters above. I too have had to toss loads of barely-used merchandise that I unwittingly bought, only to read the label that said "Made in China." I mean, the stuff falls apart almost the minute you get it out of the package.

"The country is screwed unless we can create alternative energy jobs that cannot be outsource to wean us off the oil imports that are crushing us."

This is wrong on just so many levels, let me tackle a couple:

1) as Germany found out, there is no such thing as an alternative energy jobs that can't be outsourced, green jobs are Chinese jobs.

2) Oil imports are not the problem. Oil is a worldwide economy produced for export in about a dozen countries so oil from this country is no cheaper than oil from Canada or Kuwait or anywhere, as long as we are comparing similar types of oil i.e. Brent Crude, West Texas Intermediate etc..

3) the economy is at best based about 5-10% on renewable/alternative energy (yes let's not get into nomenclature for this general discussion) so anything you do to help that portion of the economy really does nothing for the economy in general.

"Inflation does not benefit the poor and middle class. Quite the contrary. They see a lower standard of living and businesses margins are squeezed since they have higher input costs, they were already paying people minimum wage, and their customers have very little disposable income due to the inflation in necessities like gas, electricity, food, and clothing on their backs. Since the FED does not include these figures into CPI, that makes deflation look like a threat since like I said, people have less disposable income."

That's why I specified 'internal inflation'. Obviously when you have an economy that runs on petroleum, imports most of its petroleum, and the price of petroleum goes up globally, the middle class and poor are going to take a kick in the junk (this will push up gas, electricity, and food prices without associated salary increases).

In the context of the fed, this type of inflation is irrelevant, as fed induced inflation devalues currency across the board, increasing salaries and prices in fairly equal measure (though stickiness affects timing). Here, the major effect of inflation is on debts, debt holdings, etc.

markf40, my life depends on trees? ask the estimated three hundred million who have died in africa from mosquito born disease since the crazies outlawed ddt on fraud science. the enviros pretend to have human kind in their best interests. maybe the followers at the bottom do but the ones running the propaganda want people gone off the planet. conservatives get to be the first to go. then the ruling class will pick whose next. no thanks. get rid of the progressives in government.

You can't fight the Fed, so you may as well join them! While everyone else watches the side show in Congress and the President, Bernanke is unquestionably king, not only of the US, but most of the economic world, as we found out this week.

The goal is to narrow the growing gap between the rich and the poor. You can do that without resorting to draconian measures; a fair graduated income tax structure would help (e.g., eliminate the income tax for those under a specified income level--say, $25,000-30,000/yr) and raising the upper limit to, say, 40-45% for those in the upper brackets. The numbers can be tweaked accordingly to eliminate revenue shortfalls.

This is what two years of a Democratic administration with majorities in the House and Senate have given us.
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And they've also given us the bizarre spectacle of subsidizing the purchase of $100,000 sports cars (Teslas). Not to mention billions in subsidies to Spanish and other foreign companies to build renewable energy projects.

"Internal inflation tends to benefit the poor and middle class relative to the wealthy, or more specifically, the banks. Which is why we put bankers in charge of controlling inflation. While this tendency is generally weak, with home prices underwater around the country and debt hanging over everyone's head, a good round of inflation would do wonders for everyone. Just not, you know, bankers."

Bankers would be fine.

Either they are managing their interest rate risk so that they would profit from the rising rates inflation would bring, or they are not and will be bailed out by fearful politicians.

If 1933 is any indication, banks will also benefit from lower default rates and reduced loss given default.

From Mar33-Jul33, industrial production soared 57.4% (a 290.3% annualized pace). For comparison, industrial production rose 42.0% under all 8 Clinton years, a 4.5% annual pace. No other 4 month time period before or since has seen anywhere close to this type of surge, not even during WWII.

The likely cause was FDR abandoning the gold standard soon after taking office.

Then, FDR manages to blow it by signing the NIRA in June 1933, which among other disaster raised wages by 20%. From July 1933- December 1933, industrial production falls 18.5%.

I view a surge in NGDP as more important than a surge in inflation (negative supply shock can also raise prices), but the point stands that there is historical precedent for monetary action to sharply accelerate a depressed economy, and that acceleration is at a minimum reduces both defaults and losses on defaults.

12thgenamerican, your life does depend on trees (or more generally, O2 generating plants). That said, provided you aren't a Captain Planet villian planning on destroying all plant life for the fun of it, I don't think there is much to worry about.

But the Vice President said that this past summer was THE summer of recovery with 500,000 jobs created every month. When are you Mr Klein going to report the REAL news that the people you so adamantly support are complete and utter incompetent failures.

"We are in a recovery. Little noticed in all the hype about the jobs report was the report an hour later that the service sector of the economy grew for the 11th straight month even while manufacturing orders fell.

"We are looking at the wrong metric if we expect to see anything but service jobs growing. We are a service oriented economy now. I accept that and plan accordingly while others worry about manufacturing jobs that aren't coming back.

"Hate to be cold, but there it is."

===============

My original posting said nothing about manufacturing. That's an issue of its own only tangentially related to the recovery question.

Yeah, I know that, statistically speaking, the economy allegedly is "growing." But the ground level reality is a disaster. Unemployment in the real world is in the mid-teens nationwide, and higher in some places.

Talk of "recovery" is a joke and an insult to everyone's intelligence, or what's left of it. If the people in the media wonder why hardly anyone believes them about anything, they ought to have a look at their stories about "recovery" and "a strong Christmas shopping season."

Come on, does anyone actually believe that utter sludge? I hope to God that the reporters who write those stories at the very least take a bathroom break to have a good, long vomit.

I'll bite, but bring me something please. Where are the jobs that will break the unemployment logjam? I mean everybody talks about jobs, not just you, but nobody specifies what jobs we are talking about. What industries will be hiring? There's the rub.

My own view, coldy stated, is that this is for the immediate future at least the new normal.

It's an ugly jobs report and the Rethuglican plan is to give tax cuts to millionaires WHO DO NOT CREATE JOBS and cut unemployment benefits to those who spend money benefiting the economy.

Hmmm...wonder what we should be doing? More stimulus that jump started the economy and avoided a full scale depression just 18 months ago or more of the same tax cuts that created the mess we're in currently?

You know what? To HELL with the rich. Americans spent the last three decades idolizing the rich and telling ourselves that, someday, we're going to be one of them. We've also been told that the rich "create jobs." How's that working out for everybody?

Rich people have sold us a lie that they're somehow superior to the rest of us, and now even the poorest Americans tend to agree. Well, I call bulls**t. Rich people hoard their money in bad times and everyone else has to suffer. I say tax them into oblivion and create some jobs for a strong middle class. If the rich are as collectively brilliant as they keep telling us, they'll find a way be rich again. For now, raise taxes on the rich and create a New Deal-style jobs program. I'm tired of this crap. If Obama can't pull it together, he needs to get out of the way and Howard Dean will get the job done. Mitt Romney or Sarah Palin ain't gonna do anything.

Guess what? The corporations that run this country and have bought the politicians, especially the Republican politicians, aren't making the majority of their profits in the US anymore. Our population is 325 million or so. The rest of the world has 6+ billion people. That's were the real money is. Corporations are neither patriotic nor moral. They operate on the bottom line. They will not create jobs or locate factories in this country just because their headquarters are here, not if their markets are elsewhere, they can get the materials they need elsewhere, and the cost of labor is lower elsewhere. Grim, grim, indeed, for the American worker. If we don't start creating new industries here in this country, we will never create the 160,000+ jobs a month needed to be prosperous again. It certainly looks like America is sliding into 2nd rate status at a rapidly accelerating rate. The plutocracy is scrambling to grab as many crumbs as they can before the decline becomes critical. After all, the rich don't worry about living next to an expanding slum, or falling home prices. They can live anywhere. There are many countries that will give them passports, no charge, just for investing in their economies.

I agree with everyone. It is wrong to say we are "in recovery". What we are in today is "reality", not "recovery", and we will be here for a long time. This is our sustainable economy. Learn to love it.

That is, assuming that we don't find another bubble (not a great assumption) or benefit from effective, united leadership from the government (safe assumption).

This marks the abject and complete failure of Obama and all you libs that think Keynesian economics works. Fools. Cut the hell out of taxes and cut the hell out of spending if you want to see results. 2012 cant get here soon enough.

markf40, no freaking kidding? you would have to be in second grade not to know that trees put out oxygen. i was trying to be incredulous. to compare the amount of people who have supposedly been offed by pollution to the number of people who died because ddt was outlawed, let alone the number of people murdered by socialaist regimes in the last hundred years was my intent.but anyone under 30 has no interest in that. saddam set 700 oil well on fire and i remember the nitwits then saying we would have a ''nuclear winter''. get rid of the progressives in the government in 2012.

The Obama administration cannot lie its way out of this one. Obama's smoke and mirror act cannot hide the failure of his administration in creating new jobs. There has been NO stimulus to the economy. The only way we are going to dig out is by Americans doing it in spite of Washington. Stop aiding illegals , don't hire them, don't extend housing or free medical. If Obama wants to stimulate the economy, create a bounty for turning in an illegal. If deported the person turning the illegal gets a tax credit. Hire unemployeed truckers to truck the illegals to the border. Hire unemployeed persons to help patrol the border. Add judges and personel to speed up deportation so it takes 48 hrs of less from time of pickup to deportation. The saving in free services will pay most of the cost for the additional deportation workers.

We need to get rid of that health care bill, which clearly had caused these unexpectedly high unemployment levels. Employers are not hiring because of the added costs they face under this health care legislation, and we need to get rid of this overregulation of business as soon as possible or see joblessness soar. Democrats only want the issue, and they're not at the least interested in the costs of their reckless legislation.

Sorry Mr. Klein this was a left turn. The numbers are the result of left wing Keynesian economic theory put into practice now we are reaping the whirlwind created by the fools who still believe in such utter foolishness.

So much for the top heavy stimulus that primarily funded union jobs to pay back an Obama promise. The Obama administration does not get it but continue to push the idea of taking from those who have and giving to others. With over 40% of the public now not paying Income taxes and the Obama administration continuing to come up with more ideas where that group receive more tax money the numbers will only continue to climb.

and manflap lips gro-bammy and the bolsheviks think there is gonna be a recovery as they raise taxes to cover bailouts in the trillions all over the world funded by the working income producing American taxpayer?

With over 40% of the public now not paying Income taxes
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Actually, Topgun, its more like 50 percent. Half the households in this country do not pay income tax. The top 2 percent are bearing the burden.

This Administration thinks that economic recovery will be through the subsidization of blue collar jobs. This ignores the fact that this country is becoming a service economy. Does it really think that a laid-off software engineer is going to get a job in construction?

With over 40% of the public now not paying Income taxes
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Actually, Topgun, its more like 50 percent. Half the households in this country do not pay income tax. The top 2 percent are bearing the burden.

This Administration thinks that economic recovery will be through the subsidization of blue collar jobs. This ignores the fact that this country is becoming a service economy. Does it really think that a laid-off software engineer is going to get a job in construction?
====================

Thanks to supply side economics, the top 2% will soon own the whole country anyway.

By having a capital gains tax that is lower than the earned income tax rate, we make it more profitable to gamble with money than to work for money - encouraging investment bubbles, fraud, and vastly increasing the advantage of existing wealth over those working to become wealthy. It takes capital to gamble with capital, and those with it now have around a 20% tax advantage over those without (I am referring to the working middle class not the subsidized poor). This advantage increases geometrically with the amount of capital available. The incomes of very rich rapidly pull away from the merely rich, who slowly pull away from the upper middle class. This effect creates a middle class that now owns less of the countries wealth and in effect becomes larger and considerably poorer. Since this group is the main source of economic consumption, our economy slowly starts to stumble and stagnate.

Is it possible that two/three-income family is having an effect? In adding to the unemployment figures, pushing wasteful consumption (products of convenience but lacking in durability or value) and introducing social realities (raising children) to less efficient channels (government, psychologists, prisons).

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